At the request of Dan Linna, Director of Law and Technology Initiatives at Northwestern Pritzker School of Law, Dan Rodriguez (also of Northwestern) and I facilitated the October meetup of Northwestern’s Chicago Law and Technology Initiative. The group brings together Chicagoans to explore legal innovation, how technology can improve legal services/access to justice and legal startups.
We designed the meetup as a discussion on regulatory reform with perspectives from tech entrepreneurs, law firm legal ops personnel and participants who may not be licensed practicing lawyers. Specifically, we wanted to engage their viewpoints on whether some of the Rules of Professional Conduct may be barriers to innovation in the legal field and contributing to the access to justice gap.
Exploring the Rules and Innovation
We opened the meetup with a short presentation on Rules that may be triggered by products or services developed in the legal tech industry. Operators in this space know they can’t run afoul of the Rule against the unauthorized practice of law (UPL) (Model Rule of Professional Conduct 5.5), which exists in virtually every state. The rule against UPL is designed to protect the public from incompetent lawyers delivering incompetent legal services. It also applies to those who haven’t received a law license, as well as owners of tech companies that may develop products or employ methods that bar regulators interpret as engaging in UPL.
In addition, certain ABA Model Rules restrict the ways that lawyers market their services. Model Rule 7.2 prohibits a lawyer from “compensating, giving or promising anything of value” to a person for recommending the lawyer’s services, unless it’s to pay the usual charges of a legal service plan or non-profit lawyer referral service. This Rule has been criticized for driving for-profit platforms out of business (e.g., Avvo). It has also been critiqued for depriving would-be customers from legal services, and preventing lawyers from scaling their practices to reach potential customers in distant locations.
Ground zero in the regulatory reform movement is Model Rule 5.4, which has been adopted in most U.S. jurisdictions. The Rule is titled “Professional Independence of a Lawyer,” but most of its provisions prescribe the economics of a lawyer rather than the ethics of their behavior. For example, the Rule prohibits a lawyer or law firm from sharing legal fees with nonlawyers and from forming partnerships with nonlawyers if any activities consist of the practice of law. It also prohibits lawyers from practicing in a professional corporation or association if a nonlawyer has an ownership interest or is a corporate director of officer. These provisions are apparently based on assumptions that affiliating with nonlawyers would negatively impact the professional independence of a lawyer.
Rules 1.7, 1.8 and 2.1 address the requirement of independent professional judgment. Therefore, some argue that there’s no valid regulatory purpose for Rule 5.4’s prohibitions.
Update on State and National Task Forces
Next, we outlined efforts underway by state task forces and national organizations to modify some of the Rules. Rodriguez then shared the conclusions of Bill Henderson’s watershed Legal Market Landscape Report, which was the impetus for the formation of task forces in various states. He discussed recommendations from task forces in California, Arizona and Utah, and shared the work of the Association of Professional Responsibility Lawyers and the Institute for the Advancement of the American Legal System. Both organizations are studying the issue to formulate recommendations that can be adopted broadly by state supreme courts. I added that Illinois would soon be entering the re-regulation dialogue through the Chicago Bar Association/Chicago Bar Foundation Task Force on the Sustainable Practice of Law and Innovation, which kicked off on October 7.
While the task forces are at different stages, they seem to be formulating fairly diverse recommendations. However, a consistent theme is that certain Rules (including Rule 7.2 and 5.4) are unintentionally contributing to 70-80% of Americans whose civil legal needs aren’t being met.
Engaging in Small Group Discussions
After presentations from Rodriguez and myself, we split attendees into small groups for a more intimate discussion. The groups reflected the diversity of roles present at the meetup: lawyers in firms, lawyers in legal ops, tech entrepreneurs and law school and computer science faculty and students. A facilitator led each group through questions related to how the Rules impact the profession. After the small group discussions, participants returned to the main room and shared their thoughts.
As expected, the comments didn’t stay within the lanes of each question. But the conversations were robust, with participants offering perspectives from disparate experiences across industries and geographies. I share the discussion questions here in case you’d like to use them in a focus group or CLE:
- Will changing the rules affect access to justice/the delivery of legal services? How or how not?
- Has the proscription against lawyers sharing fees with “non-lawyers” impeded projects, work and innovation in your legal space? Please share specific examples.
- What could be the benefits if the ethical rules were changed to allow the sharing of fees between lawyers and others? Possible downsides?
- What benefits would you expect if lawyers were allowed to partner with (or form a P.C. or for-profit association) other types of professionals in the delivery of legal services? What could be the downsides? Please share specific examples.
- A main principle underlying regulation is protection of the public.
- How do we obtain input on the need or desire for protection from would-be or current customers?
- Do members of the public know that lawyers aren’t allowed to pay for referrals, share fees with or go into business with other professionals? Do they care?
- If regulations were eased, how might legal services consumers be impacted in the short-term and long-term?
Engaging in Others in Change
It’s clear that the path we’re on isn’t conducive to the delivery of efficient civil legal services to Americans who could benefit. And this path isn’t providing for the sustainability of law practices either. However, as we witnessed at the meetup, a venue that considers the perspectives of lawyers, technologists, entrepreneurs, project managers and computer scientists just may develop a roadmap for a better future.
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